V-Mart Retail's growth is outstanding: revenue grew 39.0% and EBITDA 41.0% annually over the last three years
09-05-2014 • About V-Mart Retail (
$VMART) • By InTwits
Pay attention to V-Mart Retail as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
V-Mart Retail showed growth in the last financial year. The company's revenue surged on 49.9% in FY2014. In addition to revenue V-Mart Retail also keeps delivering EBITDA growth. It was 34.8% in FY2014
If we look for the longer period the company showed fast revenue growth of 39.0% from FY2011 to FY2014 annually. EBITDA surged on 41.0% from FY2011 to FY2014 annually.
V-Mart Retail ($VMART) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 8,342 | 2,140 | 2,819 | 3,835 | 5,750 |
|---|
| Revenue growth, % | | -74.3% | 31.7% | 36.0% | 49.9% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 118 | 194 | 291 | 402 | 542 |
|---|
| EBITDA growth, % | | 63.7% | 50.3% | 38.1% | 34.8% |
|---|
| EBITDA margin, % | 1.42% | 9.04% | 10.3% | 10.5% | 9.43% |
|---|
| Net Income | 23 | 63 | 105 | 180 | 252 |
|---|
| Net Income margin, % | 0.279% | 2.93% | 3.71% | 4.70% | 4.38% |
|---|
| |
| CAPEX | 62 | 94 | 136 | 222 | 333 |
|---|
| CAPEX/Revenue, % | 0.748% | 4.40% | 4.82% | 5.78% | 5.79% |
|---|
| Debt | 284 | 378 | 402 | 353 | 438 |
|---|
| Cash | 13 | 15 | 11 | 153 | 16 |
|---|
| Net Debt/EBITDA | 2.3x | 1.9x | 1.3x | 0.5x | 0.8x |
|---|
| |
| ROIC, % | 11.8% | 19.7% | 26.3% | 23.5% | 21.9% |
|---|
| ROE, % | 6.4% | 15.4% | 21.3% | 17.8% | 15.8% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 10.5% in FY2013 to 9.40% in FY2014. In the last 3 years the company showed small growth in EBITDA margin of 0.400 pp from 9% in FY2011 to 9.40% in FY2014.
V-Mart Retail shows attractive ROIC at 21.9% for the last 12 months which assumes stable development model. During the last three years it surged - it was 19.7% in FY2011. Average ROIC for the last three years was 23.9%.
Net Income margin decreased on 0.300 pp from 4.70% to 4.40% in FY2014. In the last 3 years Net Income margin surged on 1.50 pp from 2.90% in FY2011 to 4.40% in FY2014.
V-Mart Retail operates at ROE of 15.8%. It's average ROE for the last three years was 18.3%.
Capital expenditures (CAPEX)
To this fast growth V-Mart Retail had to invest in CAPEX.In FY2014 V-Mart Retail had CAPEX/Revenue of 5.79%. V-Mart Retail showed fast CAPEX/Revenue growth of 1.39 pp from 4.40% in FY2011 to 5.79% in FY2014. For the last three years the average CAPEX/Revenue was 5.46%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.8x Net Debt/EBITDA. In the longer period leverage dropped on 1.10x from 1.87x in FY2011 to 0.78x in FY2014.
Valuation vs. comparable companies
The market closed today at 10.5x EV/EBITDA for V-Mart Retail which is 34.3% lower than 16.0x Department Stores peer group avearge calculated on the basis of 12 companies. At the end of trading day today V-Mart Retail traded at 21.0x P/E which is 49.5% lower than 41.5x Department Stores peer group avearge calculated on the basis of 2 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 27.3x EV/(EBITDA-CAPEX) which is not surprisingly 1,240% higher than 2.0x Department Stores industry avearge calculated based on 1 company.
Peers in Department Stores
Below you can find V-Mart Retail benchmarking vs. other companies in Department Stores industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Store One Retail India ($STOREONE) | | | | | |
| |
|---|
| Median (1 company) | | | | | |
|---|
| V-Mart Retail ($VMART) | 11.8% | 19.7% | 26.3% | 23.5% | 21.9% |
